The board of Fidelity Bank Plc, on Wednesday notified shareholders through the Nigerian Exchange of a virtual Extraordinary General Meeting preparatory to another capital raising exercise.
The board also wants the shareholders’ approval “to issue, by way of one or more Private Placements, up to 20 billion ordinary shares “in the share capital of the company (being not more than 30% of the Company’s existing issued shares and paid-up capital) to one or more investors in such tranches and on such pricing, times, terms and conditions as shall be determined by the board.”
According to the EGM notification, the board is seeking approval to raise additional capital up to the new issued share capital of the company by way of private placements, rights issues, public offers or any other mode or combination of modes, in such tranches, series, amounts, pricing or proportions and in such terms and conditions and at such times as may be determined by the board, subject to obtaining regulatory approvals.”
This is coming barely months after the bank concluded the raising of N127 billion in July, 2024, and it is yet to publish the outcome of the exercise which would usually follow a capital verification exercise by the Central Bank of Nigeria (CBN).
The notice assured that the combined offer is presently awaiting regulatory approval, as the “processes are being finalized and expected to be concluded shortly.”
As part of the combined capital raising exercise which opened on June 20, 2024, the bank sought to raise N97..5 billion by way of public offer of 10 billion ordinary shares at N9.75 per share, and rights issue for N29.6 billion from the offer of 3.2 billion ordinary shares to existing shareholders at N9.25 per share on the basis of one new share for every 10 shares held at the close of business on January 5, 2024.
The bank described this first phase as a resounding success as evidenced by investors’ keen interest, which resulted in “shareholders’ approval to accept surplus monies arising from potential oversubscription subject to the company’s issued share capital.
Preparatory to the latest recapitalisation plan, Fidelity Bank, in a notice to the NGX on Wednesday, dated January 14, 2025, Ezinwa Unuigboje, its Company Secretary, the board is proposing that shareholders at the meeting scheduled for 10am on February 6, approve an increase in the Issued Share Capital from N26.7 billion divided into 53.4 billion ordinary shares, to N36.7 billion by the creation of up to 20 billion additional ordinary shares of N0.50 kobo each.
The bank recalled that on March 28, 2024, the Central Bank of Nigeria published revised minimum capital requirements for commercial, merchant and non-interest banks in Nigeria, including a minimum capital requirement of N500 billion for commercial banks with international authorisation, with a capitalisation deadline of March 31, 2026.
According to the original prospectus, N20.2 billion or 70% of the N28.8 billion net proceeds of the rights issue will be invested in business and regional expansion, followed by N5.7 billion or 20% for IT infrastructure; and the balance N2.9bn or 10% is to be invested in product distribution channels.
Also, the N95 billion net proceeds of the public offering is to be invested in the same line items as follows: N66.5 billion or 70% for business and regional expansion; N19 billion or 20% to be ploughed into IT infrastructure; and the balance N9.5 billion or 10% for investment in production distribution channels.
